Liu claims that oversight and unclear policies on the part of the Department (DHS) may lead to poor housing and sometimes extortion by landlords.

The Work Advantage program (WADV) helps homeless families with secure jobs move into apartments and subsidizes their rent for up to two years. However, unclear policy -- and poorly enforced policy beyond that -- has lead to oversight and mismanagement, the comptroller's office contends.

That alleged mismanagement can increase the risk of clients being placed in unsafe living conditions. Families have also been subject to extortionary side-deals with landlords, the audit claims.

"During our interviews with DHS staff, we found instances of confusion about policy changes resulting in their disseminating incorrect information to clients," the full report reads. "We also found confusion about the procedures for conducting clearance checks and inspections, which may result in the leasing of apartments in buildings with hazardous violations."

But the DHS defended itself and its record.

"Over 20,000 Advantage leases have been signed allowing New Yorkers to move from shelter to homes," said DHS Commissioner Seth Diamond in a statement to NBCNewYork. "As a result, we have seen the families census go down nine percent over the past nine months as families continue to return to their communities."

Commissioner Diamond added, "The Comptroller's allegations are unsupported and Homeless Services has sufficient practices in place to ensure that clients enter into safe housing and that landlords and others follow program guidelines."

Both Diamond and Liu are probably right, but it's hard to dismiss the Comptroller's findings. For example, although DHS officers are aware of instances where landlords forcibly arrange side-deals with their WADV tenants, the agency has done little to combat it, the audit claims.

Officials with HomeBase, another DHS program, say many clients claim they are being forced into side-deals, but few will formally lodge a complaint because they fear retribution from the landlords.

In addition, 24 of 29 interviewed case workers never had or couldn't find their policy and procedures manual, which was itself outdated, the Comptroller's investigation found. This lead to inconsistent treatment of families that the agency was trying to help.

And when DHS inspects apartments for "potential violations," it only photographs apartments that pass safety criteria. And the DHS employees were unable to define "potential violations" to the Comptroller's interviewers.

The audit contains responses from DHS and rebuttals from the auditors that almost sounds like bickering. However, the audit passes no judgment on the program's overall success, and DHS has planned a new operating system to go into effect this fall.